Jubilant Organosys buys back FCCBs
Chemicals and drugmaker Jubilant Organosys is buying back part of the Foreign Currency Convertible Bonds (FCCB) amounting to $48 million, taking its total FCCB buyback to $59 million.
By Khomba Singh, ET Bureau |
NEW DELHI: Chemicals and drugmaker Jubilant Organosys is buying back part of the Foreign Currency Convertible Bonds (FCCB) amounting to $48 million, taking its total FCCB buyback to $59 million.
The Delhi-based company had raised about $250 million through FCCBs three years ago, part of which expires in 2010 while the remaining matures in 2011. The company had raised the fund for financing acquisitions. Earlier this month, the company bought back FCCBs worth $11 million that retire in 2011.
In a filing to the Bombay Stock Exchange (BSE) on Thursday, the company said it will pay $2.5 million to buy back bonds carrying a principal value of $3 million which expire in 2010. After the buyback, the company's outstanding bonds which expire next year will be reduced to $49.6 million.
Similarly, it also buying back bonds with a principal value $45.3 million which matures in 2011. It will pay bond holders $37.1 million in cash for purchasing the bonds. Its outstanding bonds that retire in 2011 after the purchase will be $143.6 million.
The Reserve Bank of India (RBI) has recently allowed companies to buyback FCCBs at discount. If companies use funds raised from overseas borrowings, the bonds have to be purchased at a discount of atleast 15% to the book value of the stock.
But if a company uses its internal accrual in rupees the bonds have to be purchased at a minimum discount of 25%. The buyback funded in rupee resources is capped at $50 million. Jubilant is buying back the bonds through funds raised from foreign borrowings.
The Delhi-based company had raised about $250 million through FCCBs three years ago, part of which expires in 2010 while the remaining matures in 2011. The company had raised the fund for financing acquisitions. Earlier this month, the company bought back FCCBs worth $11 million that retire in 2011.
In a filing to the Bombay Stock Exchange (BSE) on Thursday, the company said it will pay $2.5 million to buy back bonds carrying a principal value of $3 million which expire in 2010. After the buyback, the company's outstanding bonds which expire next year will be reduced to $49.6 million.
Similarly, it also buying back bonds with a principal value $45.3 million which matures in 2011. It will pay bond holders $37.1 million in cash for purchasing the bonds. Its outstanding bonds that retire in 2011 after the purchase will be $143.6 million.
The Reserve Bank of India (RBI) has recently allowed companies to buyback FCCBs at discount. If companies use funds raised from overseas borrowings, the bonds have to be purchased at a discount of atleast 15% to the book value of the stock.
But if a company uses its internal accrual in rupees the bonds have to be purchased at a minimum discount of 25%. The buyback funded in rupee resources is capped at $50 million. Jubilant is buying back the bonds through funds raised from foreign borrowings.
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